Consider two different examples of cost-effective variety/flexibility and assess how each enterprise could learn from the other. What would each do differently or additionally? Would these ‘transplanted’ approaches succeed?

Question

What will be an ideal response?

Answer 1

Example 1: Lands’ End, a large mail order/internet retailer uses a UK national distribution
contractor. In turn, the latter uses self-employed, local agents to convey parcels from regional
distribution centres to individual homes. This approach is flexible and reduces delivery delays
occasioned by recipients being unavailable during normal working hours, hence greater customer
satisfaction.
Example 2: Benetton (this chapter, closing case study) sorts and distributes finished garments
directly to its many thousands of franchised retail stores from a centralised, automated distribution
centre, enabling it to respond to retail demand in each market on a daily basis.
Benetton stores might gain incremental sales by accepting small orders taken for out-of-stock items
and more specialist lines that the centralised distribution centre despatches, not to the stores, but to
regional centres operated by independent contractors who deliver orders direct to consumers’ homes.
Lands’ End might benefit from appointing a moderate number of franchised retail outlets as a
complementary addition to its mail/internet trading model, at least for selected lines. The
transplanted approaches would benefit consumers through additional services, probably resulting in
increased sales. However, they would add operational complexity and involve partners that would
have to be competent and willingness to incur costs without an initial guarantee of adequate profits
arising.